6 Ways To Save For Your Retirement

Anyone already in the 60s will know exactly how important it can be to save for your retirement whilst you're still young. Those who’ve made adequate arrangements will be looking forward to finishing work and living the life of luxury, whilst people who’ve made bad choices will start to feel rather stressed about what their future may hold. 

Thanks to the new workplace pension schemes being rolled out across the UK at the moment, most young people should have a more substantial cushion when they reach their twilight years, but that doesn’t mean that keeping some cash aside for a rainy day isn’t a good idea. 

Here are the top 7 ways you could save for your retirement before it’s too late:

1. Get An ISA - The first thing you should all do right away is take a trip to see your banking provider and open an ISA account. These provide high rates of interest and depending on whom you use, could allow you to save anywhere between £3000 and £5000. With no tax to be paid on any of the money accumulated, this makes for a perfect rainy day fund.

2. Clear Your Debts - There’s hardly any point in saving if you’re just going to be forced to hand the money over to cover your debts, so you should work hard to clear these as soon as possible. Just paying a little more than the minimum amount off your credit card can make a significant difference.

3. Join A Private Pension Scheme - Although you should be automatically enrolled in a workplace pension scheme soon, there are no laws surrounding how many of these policies you can take out, so doing some research online and locating a reputable private solution could also be very beneficial.

4. Cut Down On Luxuries - We all want to have a good time whilst we’re of working age and earning the cash, but it’s even more important that you raise the quality of life you’ll experience during the twilight years, and this is why cutting back on luxuries you don’t really need like designer clothes and flash cars would make sense.

5. Make Sound Investments - If you have a lot of money lying around not doing very much, it could be wise to seek out fruitful investment opportunities to increase your pot. I realise that most people have no experience with this kind of this, which is why I’d like to point you in the direction of a blog called MoneyStreetSmart because they have some fantastic advice articles that deal with all elements of personal finance.

6. Stop Moving House - You know; thanks to my family and their lack of foresight, I’d moved house over 11 times by the age of 16, meaning neither my mother or my father have a great deal of money within their properties. Picking one home and sticking to it will provide you with the best opportunity to accumulate equity that can be released when you retire by simple selling your home.

Well, I hope now you understand the importance of making early preparations for your retirement and ensuring you don’t have to rely on the ever dwindling state pension of only £110 per week.

Good luck with everything!

What You Need to Know Before Opening an ISA

If you are interested in saving for your future, there is a great option you may have heard of. The Individual Savings Account (ISA) is a tax-free way of saving money for your short or long-term goals. It is a way of saving your money under a tax shelter. The concept of an Individual Savings Account is simple to understand, however, there are a few things you should understand before opening an ISA. 

Cash ISA versus Investment ISA

There are two types of ISAs: cash ISAs and investment (stocks and shares) ISAs. In either case, an ISA manager handles your account. You do not have to pay income tax on the interest and the gains are tax-free as well.

The cash ISAs are great for short-term savings accounts. You can place the money into the account at any time or place a lump sum in there up to the annual contribution limit. You can readily pull your money out, and there of course may be penalties for doing so.

An investment ISA allows you to place your stock market investments into a tax-free shelter as well. These are advised to invest in for long-term opportunities. These are a risk and your funds will go up and down. Therefore, if you are depending on the money, it may not be the best option for you. 

Check Out Multiple Bank Offers

Banks operate under different terms and conditions when it comes to their ISA’s. Some banks are more lenient than others are. You may find a bank that allows you access to your money immediately while others go through strenuous paperwork. A bank may pay you a fixed rate if you do not touch your ISA for a full year. You may start with a bonus rate for your initial deposit, but the rate may drop over time. 

Transferring Fees

A bank can charge you transferring fees. That is a major catch and deal breaker for some people. Remember, you cannot withdraw your own ISA without incurring a fee. It must be transferred over. So find a bank that does not charge a fee. You may find a better interest rate later and it will be too late at the end of your term to transfer and receive the advantages.

When transferring, you want to make sure it is simple to do and done correctly. If you have cash and investment ISAs, they both may not be able to transfer to the same bank. An investment management firm such as Nutmeg makes transferring existing ISAs simple. They offer stocks and shares ISAs. They help you build and manage your portfolio. 

Apply Early and Get Your Documentation Ready

The deadline for ISA applications are April 5. Your maximum annual contribution amount for the cash ISA is £11,280 for the 2012-2013 tax year and £11,520 for the 2013-2014 tax years. You will find many people hurrying at the last minute to get them in. Once you have found one you are interested in, hurry and apply. Before that, get your documentation ready such as your identification, address verification, and your National Insurance number.

Start Investing in Your Future Now

Manage your money with investment portfolio management tools

You are never too young to start investing for your future. While you may not really be concerned about your retirement right now you should still start putting some of your money aside. Investments are a great way of supplementing the income you have in your retirement and it can make a huge difference to the quality of life you’re able to afford when work is no longer an option. And let’s face it, do you really want to work into your seventies?

If you are smart you’ll begin investing your money as soon as possible. If you build a diverse portfolio you can reduce the risks that can be found when investing and build a great income to help you in the future. Lack of knowledge can result in many individuals not even considering investing their money but you can get over this step. There is plenty of advice that can be found online and you should always consult with a financial advisor who will be able to give you some valuable information.

You’re not too Young to Start Planning for Your Retirement

The earlier you begin investing the better; your investments will have much longer to grow in value. However, you should never simply buy stock or start investing in shares without managing your money and keeping an eye on what’s happening in the markets.

As soon as you begin work you should ask your employer about their pension plans if they have one. It is worth paying into a pension plan and if the company doesn’t offer one, you need to look into finding your own. Don’t leave it there though; you can also start saving money in ISAs or buying stocks and shares.

Diversifying your investments involves spreading out your money over different market categories. You can look at putting some cash towards stocks that are more conservative that have regular dividends as well as ones that offer more long term growth opportunities. Additionally you might like to take some greater risks that have the opportunity of receiving much greater returns.

What You’ll Need When You Start Investing

It is important that you seek some advice before you do anything. You will need to establish how much money you will want to invest initially and decide where you would like it to be invested. You can choose to play it as safe as possible, choosing only the low risk options, but if you are ready to accept more risk, you could put aside a small proportion of your funds for something that could really pay off in a big way.

When you decide how to proceed you will need to find yourself a way of managing your stocks and shares. The best option is to use an investment portfolio management tool. This allows you to monitor your diverse investments in one place. By doing so you will be able to react quickly when you need to and help reduce the risks of losing your investment simply because you haven’t been paying enough attention.